Transcript: 10/20/09 - CIO Teri Takai presentation on shared services

CALIFORNIA CIO TERI TAKAI
Government Technology Forum on Shared Services
Sacramento, CA

October 20, 2009

MS. TAKAI: What I wanted to do this morning was to try to bridge the gap a little bit between what David just talked about in terms of what we're seeing at a national level and what we're seeing in California and how that actually applies to us. So let me just ask a question here. How many of you -- and be honest, because I, you know, I don't always put the names and faces, so we're not, you know, keeping count or anything. I mean, how many of you think that shared services is a good idea? OK. How many of you think that shared services is possible in California?

Well good, OK. How many of you just think we're just too big and it's never going to work?

Be honest, now. Come on. (Laughter)

All right. Because there are days when I actually agree with you which it just seems like a bridge too far and it's just really tough to do.

Well that's good. I'm encouraged by -- encouraged, actually, by the response, because I think as we move forward and as we really talk about what's possible in California, I actually think that what we're seeing here is a reflection of what you see in the national trend. It's interesting. You know, we're having a National Association of State CIO conferences and in fact that's going to be next week. And one of the things that we always do is to try to gather from all the state CIO's across the country what are your priorities.

And we get different stuff, you know. Sometimes it's cyber security that's a high priority. Other times we get other things. And I think it's been interesting as I've been looking at the results from the CIO's coming in, I mean, at least from a CIO perspective consolidation of technology is really at the top of everybody's list. And so I think we're starting to see a difference even in the way CIO's are looking at what they do and clearly that reflects some changes that are happening from a business perspective. And I think as David said, if you read not only Govtech but some of the other government publications, what you really see is that there's really, I think, a sea change in the way that we're looking at it.

But, you know, clearly it's not one size fits all. You know, David's presented, I think, what's happening on a national basis and, you know, some of those things work for California and sometimes they don't. You know, we have clearly a set of challenges moving forward and we actually have a lot of variation in the way that we're addressing shared services.

So what I wanted to do was to kind of put this in context. So what I want to do is to kind of talk about some of the things that we're doing that are really going to set the stage for where California's going from a shared services perspective. Actually at county a bit we're already doing shared services. We may not think of those things as shared services, but I think when you see some of the projects -- and it's really only a subset that I'm going to talk about -- there's some other things beyond what you would think would be sort of the subset shared services projects that some of you are involved in. And then there's just to talk about kind of a little fun thing that's called -- that I call myth busters, which is just sort of the things around how do you actually make shared services work and what are some things that you think about work and maybe don't work or how you look at things a little differently.

And one of the reasons why I wanted to talk about shared services today is because I want to put shared services in a context of things that we have been driving towards. You know, I think it gets a little bit confusing sometimes, you know. I was talking to one of the CIO's the other day and what he said to me, God love him, was, he said, "Teri," you know, he said, "we're really excited," he says, "we're really, you know, we really think you're doing a lot of the right things except you're driving us crazy. But a lot of the things, you know, we see what the direction is."

And so it's kind of, I know, this yin and yang in terms of working with the office. There's days when you hate us and other days where you like us. I hope the days you like us are getting more than the days you hate us, because we're really pushing hard on a number of different fronts. And I wanted to put that in the context of shared services and why we're driving in the directions that we're driving from a technology perspective.

And so I think you've heard me talk about shared services really requiring an enterprise view of technology. And that's really what we've been driving to. So just to put that in context, this is kind of a report card that some of you may have seen me use before around what are some of the building block steps that the office is really going to try to put in place. Because we've asked you all to participate, those of you that are in IT organizations, you know, some of you or folks in your organizations spent time preparing these kinds of documents and I recognize that you're doing them on top of furlough days and on top of trying to get your day-to-day work done. And I really appreciate the time and the effort that you really put into making these happen. But I wanted to put these in context, because I didn't want you to think that we were doing them just for the sake of doing them. There actually is, believe it or not, a method in the madness of the kinds of things we're trying to do. So one of the things I think that many of you know we're working on is really to put in place an IT strategic plan, to talk about directionally where we're going. And for those of you that have looked at that plan, you've seen that, we've talked about sharing of information, particularly data sharing. A lot of things that we want to put in place to make it happen.

Second is the IT capital plan. Some of you may say, "Well what does the IT capital plan have to do with shared services?" Well the IT capital plan gives us a five year view of what your organizations are planning in terms of projects, and it's given us an opportunity to come in and say, "Don't do those as single projects in departments; do those in a way where you can actually share the technology at the back end, leading to the potential to actually be able to share business projects."

And it requires architecture. Again, we haven't said there has to be a stable enterprise architecture, but what we have said is on an agency basis try to gather together what technologies you're using so that you're using technologies in a shared services way, because our belief is that then as we're using technologies in a much more common way we make it easier to build the business processes on top of that. We take technology out as something that we have to relearn every time, we do it on a shared services basis, and it gives you a way of building much more of a business process on top of it and it's consolidated in a shared services way.

Project and program management. Now, one might not think of that as shared services, but in reality, I think that some of you that are involved in these projects know that getting to the point of shared services requires managing in a competent, consistent way and also being able to do (inaudible) learn, learning from what other groups have done and being able to apply that in a very standard way. So we think project and program management is an important part of very large projects, and shared services projects tend to have a lot of those components.

Our Geographic Information Officer. (inaudible) our reason for appointing him was to try to drive the way we're doing GIS into a shared services model. And that's in fact what Mike Byrne is working on today is to get all of the GIS activities to work together to build on a concept that actually started at Resources Agency towards what's called Cal-Atlas, be able to use that as a basis for shared services for GIS for the state, and then be able to grow out and use that to collaborate with the locals. So that seems like an independent action, but in reality it was really based in our desire to move to that model for GIS.

Our reorganization proposal. One of the reasons that we brought the Department of Technology Services, now OTech, the reason that we brought Office of Information Security and we brought the public safety and 911 groups in was to start to build, as David says, an independent entity that could provide services to everyone.

Now, I think all of you would agree, because we're all sort of sharing here, that we've got a ways to go. Customer service isn't exactly what we want it to be, because that organization really in the past has been a little bit of trying to be everything to everybody. But as we're able to focus that organization more on the areas that (inaudible) architecture that you want to move in, as we're able to focus then more at being customer service-oriented, as you're looking to service -- at shared services models -- we're going to be able to get that organization to be what everyone wants it to be in terms of being able to being able to provide email on a shared services model, in terms of being able to provide data center services. So they all need to come together.

And then finally all of the consolidation planning. As David said, there's a continuum from centralized to decentralized. And we're looking more at a consolidated model where we're asking each of you at the agency level to operate in a more consistent way to look at shared services opportunities. Now interestingly enough, in this state we're actually getting some cross-agency and cross-departmental looks. I think many of you know that VOV and EDD and FTB are looking at how they can share call center, how they can share processing of tax returns. I mean, those dialogues are happening today, and what we need to do is to really look at not only the business processes but what is the underlying efficiency that we can get by those groups working together.

And so consolidation planning is a way of taking steps to get there. You don't sort of just fire it on and say, "Wow, we're going to be shared services tomorrow." It's a big change, as David said. It's a change in the way we look at things, and so what we're looking at it is how do we say what to expect to be able to get there so that we can learn how to do it, because it is a different mindset and it is a different way of thinking about how we do things.

Now, you know, very often we say, "Well, is it --."

Now, all of these same components are the things that we believe are required to get a base for a shared services model. All of them really give us an opportunity to look at things on a much more enterprise basis. And again in some cases it's across the state, in some cases it's on an agency by agency basis, in some cases it might just be departments coming together to do shared services based on what they see their common needs are. So all of those same things actually fit into the model that we're trying to build. And I thought it was very important for us to really talk about that, because I think we tend to see these as independent different actions and how do they all fit together, and in reality if they fit into what we're going to be talking about today.

But again, you know, big question is will the technology drive the business, or does the business drive technology? Well, my belief is in the case of shared services it's a little bit of both, interestingly enough. Sometimes it's a question that we don't want to be running separate systems to do the same business function. And now all of a sudden we decide that we're going to have an IT project and in reality it's not an IT project. What it really requires is that we all learn how to do the business in the same way in order to get the technology project to work.

In other cases we know that we need to have more consistent business processes as we find that the technology is holding us back. You know, the thing that I think I've heard before -- not so much here, but in other places -- is that people love to say, "Well, you know, I'd love to do things in the way that, you know, my department next door does it, but I can't because my computer systems won't let me do it." Has anybody ever heard that argument before? So, you know, you get that kind of, well what is it? Is it, you know, because all of our business processes today are so embedded in the technology it's impossible to actually distinguish between what's a technology change and what's a business change? Because in some cases and in many cases, it's actually the same thing.

So that's why we'll see as we go forward, again, some shared services projects being driven by the desire to change technology and upgrade technology and other cases it'll be a recognition right out front that we need to make a business change and the technology is holding us back.

So what does that mean for California? Well, we're already there. Many of you in the room are from (inaudible) Cal, right? Raise your hand. God love you. I mean, this is a group that, you know, they're the ones that have taken off and really bitten the big shared services project and clearly it's going to be a challenge moving forward, but I think the team is continuing to roll with it.

Secondly, at 21st Century, is anybody here from the Controller's office? I mean, clearly Jan's here. That -- I still call it 21st Century, Jan, even though I know it's sort of MyCal (inaudible) is a piece of it. But again, you know, that's the project driving forward to take a shared service and really be able to improve it, upgrade the technology and really make that happen.

I talked about GIS. Now, a couple of projects, and these certainly aren't an all-inclusive list that you might not think of as shared services projects but that actually are, and one of them are the business information systems, the BIZ project at CDCR. For those of you that are familiar with CDCR, one of the things that they did was they actually several years ago went from every prison actually doing their own procurement, personnel, accounting, financials, into doing it in service centers. And they're now going through and modernizing and putting in a new ERP solution. And interestingly enough -- is anybody here from CDCR? There you go. (inaudible). Interestingly enough, one of the things that's really helped with that implementation is they did some of the reorganization change, brought together service centers, and now they're implementing the technology.

They also now have another project which is called the Strategic Offender Management System. Are you familiar -- are you from SOMS or from BIZ?

UNIDENTIFIED SPEAKER: Neither one.

MS. TAKAI: Neither one. Oh, all right, OK.

SOMS is a project that's just starting up because today every prison has their own way of being able to track personnel. And one of the challenges that they have is they don't have a consistent way of being able to do that tracking and sharing between prisons. So they're putting up a huge application for corrections for CDCR which is really going to be one of their major initiatives to have a single system, not only because it's a shared services model, but because it allows them to do things consistently, but more importantly to track between prisons.

And this is only a small list. I mean, there are projects that are going on inside agencies, sharing between different departments, and David brought up one which I think is also going to be very interesting for California. For anybody that's here from Health and Human Services, you know that the legislature's actually asked us to look at what an integrated eligibility system would look like for California across the counties that currently do all of the eligibility today. So I think, again, to the point of driving towards many of these concepts, we're seeing it come from all different places. We're seeing the legislature ask us to look at shared services, we're looking at the business process and we're also looking at it from a technology perspective.

And in my view, that's OK. There's not a single way of looking at this. There's a whole lot of business drivers. But in the end what it really pushes towards is doing things in a more consistent way, looking at ways that we can do them more efficiently, looking at ways we can do them more effectively. And I want to reiterate something that David said, which is really important, and that is we always tend to think of these things as just being something that we should look at from a cost-savings standpoint. I happen to believe, as David does, that you don't actually look at it that way. You look at it from the standpoint of how do you do the business better, how do you do it more effectively, how do you serve the citizens better, and interestingly enough, you get the costs saved as a result of that. You have to have a business justification, but if you go at it from the standpoint of how you do the business better, the dollars will actually follow.

So what is the secret to shared services? Well, I think the challenge and the (inaudible) of this gal that raised her hand, I think it's really about a mindset change. It's really about believing that if we do some things collaboratively, if we do things together, we can still do them right. We can still do them in a way that we believe serves the customer. Doing them collaboratively will still give us control to do our jobs the way we'd like to do them, but again, in a consistent way.

And that's a tough mindset change, because we're used to the control of our processes and being able to ensure through the control of our processes that things are going to be done right. So when we come together and try to do consensus about what is the right process to use -- and many of you have heard me say this before -- if you get all of us in a room and we say, "Well, do we all think that, you know, consenting on a business process is the right thing to do?" Everybody in the room shakes their head and they go, "Yeah, yeah, no, absolutely. We need to do this a single way, because if could do it a single way we'll all do it better and it'll be easier."

The problem is we all tend to go in that room saying, "Well, that's going to be an easy process because my way's the best way, and so if I present my way and we all just do it my way, it will all be OK." (Laughter)

And the challenge is being able to say, "Maybe it's not my way, but I can live with it. I can see how we can do it this way and I'm going to work with it to try to make it better."

And it's really around that and then the service level concept. And one of the things I'm going to have David mention, because I've heard him talk about it before, is why he hates the term service level agreements. Because I think the point he makes about that terminology and kind of the inherent conflict that it sets up - I'm going to leave that for him to talk about. But David, I am going to ask you, because I talk about that with my folks very often around how shared services really needs to be a mindset change, how (inaudible) be a way that we think about things differently.

So let me just take (inaudible) a little humor here so we have a little bit of fun, into some of what I call the myth busters about shared services, because I think it's a tough concept. There's not a single way of doing this, but it does take us kind of thinking of things a little bit differently.

So the first one is that shared service is about technology. What do you think? Well, that's really a myth, as I said. It's really not about the technology. The technology gives you a backdrop, it gives you a structure to be able to do it, but it doesn't really fix the inherent business problems. You've got to address the business problems, as those of you know that have been in a shared services project, in order to be able to make it successful. Now are there things that we can do with technology? Are there things that we can do in a shared services model for technology? Absolutely. But we do them so that we can put applications on top of that technology and really make the business better.

The second one is shared services gets you a seat at the table. I love this one. Well the answer is yes it does. (Laughter)

What we're finding is that government is looking more and more at -- and particularly the administration is looking more and more at where can we use shared services. I think all of you know the governor's been very supportive of the things that we're doing from an IT perspective. He's been looking at where we can do some of -- as I mentioned, year round, the tax agencies is something that the governor's been very supportive of. So the governor's really looking at ways, obviously, with the huge budget deficit that we face, how do we actually live within our means? How do we live within the budget that we have? Next is that failure is intolerable. Well, in reality, when you're doing shared services failure is actually sometimes a great way to learn. The challenge is you've got to fail small and you've got to fail fast so that you can learn from those experiences, learn what it really takes to do a shared services project. And that's why we're so -- it's so important to break shared services projects up into phases so that you can see how they're going to go, people can understand how shared services work, they can get comfortable with it and not feel like it's taking away from them, but rather that it's giving them an opportunity to learn and how to do things differently.

This is one of my favorites, and that is reengineering is actually a four-letter word. You know, it's really hard to design business processes on a shared services model from a clean sheet of paper. I don't know what a clean sheet of paper actually does for you, because we always start from the way that we do our business today. Now you can't do it the same way we're going to -- (inaudible) we're going to do it in the same way when we go to shared services, but at the same token we've got to start from where we are, look at how we can improve on it, look at how we can do it in a common way, and not just say, "Well, let's reinvent ourselves over night." And I think that's a challenge that always comes with shared services projects.

And finally, shared services isn't the finish line. I think as David said, it really -- when you start on a shared services project it's really only a building block to what you can do next and what you can do next. And I think we do, sometimes, in our projects, have a tendency to think, "Well, gee, I'm going to get this one done and then I'm done." And in reality that's not true. Every time we do one of these projects what we find is that there's something more we can do, something more that we can improve on. And so it's important to start the journey, it's important to be willing to get out and be one of the ones on the frontlines, if you will, in terms of trying to make these things happen, because they're such an important part of things we want to move forward.

And then finally, advocating for shared services isn't easy. For those of you that are out there doing it, it's tough. It's tough work. People don't come up to you and say, "Wow, thanks a lot for changing the way I do things." (Laughter) You know. And so these are things where, you know, you have to listen, you have to be a part of it, but there are days where you've just got to stand tall and you have to say, "I know these are the right things to do." And, you know, one of the things -- and I want to close on this, because I think it is one of the tough things, but it is important to the work that we're doing, it is important to us being able to move forward. And I think it's a real great backdrop for you to hear the story of what happened in Ontario, the time that it's taken. This is not something that happens overnight. It's something that you learn from as you go. But in the end it's something that then grows into being the opportunity to do a lot of other things.

So great. Well, thank you.

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